Millions and billions and trillions, oh my. With all the news about billion-dollar spending packages and trillion-dollar debt, It’s easy for the average Canadian to feel a little like Dorothy Gale?disoriented in a strange land after being dropped out of the sky by a financial twister.
But being a trusting lot, we’re reassured by the $40 billion dollars in stimulus spending. Along with tax credits for things like home improvement projects, a whopping $12 billion is going to be shovelled into infrastructure. That money includes $4 billion for an Infrastructure Stimulus Fund?funds earmarked for municipal, provincial, and territorial ?renewal? projects that would get underway in 2009 or 2010.
Sounds good. It’s a staggering amount of our money, but It’s going to be used to create jobs, generate spending, and get the economy back on solid ground. Or is it? As a recent Industry Canada report reveals, even while the feds are announcing massive new expenditures, millions of dollars in infrastructure funding is already sitting idle.
The report provides the federal government with details on how well Industry Canada is performing?and It’s a worrisome snapshot of what might happen to the stimulus money once the photo ops and speeches are over.
As the Financial Post reports, ?under a handful of programs designed to provide direct financial transfers to business-related activities, slightly more than $50-million went unspent.? And the Liberal party has added an interesting observation: almost half of the $3.62 billion planned for infrastructure projects in 2007-08 is still unspent.
Which raises some very interesting questions about just how effective the Conservative government is going to be when it comes to turning that $40 billion into practical results. And why everyone is so keen on putting more money into infrastructure spending when it seems so hard to part with the funds already set aside for that.
The problem can’t be put down to spending scandals. Instead, It’s plain old bad planning and government red tape. One example is the $21 million scheme intended to boost Canada’s shipbuilding sector. Peter Cairns, president of the Shipbuilding Association of Canada, told reporters that gaining access to those funds ?can be very laborious.? One roadblock is that the program gives money to the buyer instead of the builder; in effect, a rebate program. That can be a hard sell, and in the long run It’s easier for shipbuilders to secure private financing.
In the 2009 budget, the government admits that the approval process is hampered by ?duplication and inefficiencies in administration.? Hardly encouraging now that they’ve got to muddle their way through getting an unexpected $4 billion out the door.
It’s all well and good to talk about programs like the home renovation tax credit, but Ottawa needs to remember one thing: if the economic stimulus is going to work, they have to show us the money too.